I purchased a property in april 2002 for 40,000 I sold it…

Thanks.

PROPERTY 1 SOLD JANUARY 2008

Based on the figures you have provided you made a gain of £145,000. The secured loan does not count as part of the cost of the property and is not deductible.

The gain for the period the property was your main home is exempt from CGT as is the gain for the last 36 months of ownership. That accounts for £103,571 (£145,000 / 70 months x 50 months (14 + 36). The remaining gain of £41,249 is that part of the letting period gain which is not covered by the last 36 months of ownership.

As the property was both your main home and it was let you are entitled to letting relief which is the lesser of:

1 £40,000,

2 the sum of the main residence period gain and the gain for the last 36 months of ownership of the property which is £103,571 and

3 the letting period gain of £41,429.

The letting relief of £40,000 will be deducted from the remaining gain of £41,429 leaving a net gain of £1,429 which after 15% taper relief is reduced to £1,214. The first £9,200 of gains made by any taxpayer in 2007/08 is exempt so there will be no taxable gain.

PROPERTY 2 SOLD SEPTEMBER 2009

Based on the figures you have provided you made a gain of £100,000. The secured loan does not count as part of the cost of the property and is not deductible.

The gain for the period the property was your main home is exempt from CGT as is the gain for the last 36 months of ownership. That accounts for £96,154 (£105,000 / 78 months x 75. The remaining gain of £3,846 is the gain for the period during which the property was vacant. As it is less than the CGT exemption for 2009/10 of £10,100, there is no taxable gain.

Let me know if you have any queries.